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Pakistan launched strikes on separatist militants inside Iran on
Thursday in a retaliatory attack, while the U.S. launched new
strikes against Houthi anti-ship missiles aimed at the Red Sea.
Brent crude futures fell 19 cents, or 0.2%, to $78.91 a barrel
by 1202 GMT, while U.S. West Texas Intermediate crude futures (WTI)
were up 1 cent at $74.49.
"While the price of crude remains sensitive to events in the
Middle East, as we've seen over the last couple of weeks, the
oil market remains well balanced," said Craig Erlam, analyst at
brokerage OANDA.
"Supply disruptions remain an upside risk but there are downside
risks too, including the global economy."
For the week, the U.S. benchmark is on track to rise about 2%
while Brent is set to gain less than 1%. Both markers climbed on
Thursday after the International Energy Agency (IEA) raised its
2024 oil demand growth forecast.
"As tensions in the Middle East are spreading, traders don't
want to take short positions, but they are also cautious about
continuing to build long positions as China's economic recovery
remains slow," said Hiroyuki Kikukawa, president of NS Trading,
a unit of Nissan Securities.
Despite its higher demand growth forecast, the IEA's projection
is half that of producer group OPEC. The Paris-based agency also
said that - barring significant disruptions to flows - the
market looked reasonably well supplied in 2024.
While the Middle East tensions have not shut down any oil
production, supply outages continue in Libya and about 40% of
oil output in North Dakota, a top producing U.S. state, remained
shut due to extreme cold as of Wednesday.
(Additional reporting by Yuka Obayashi and Andrew Hayley;
editing by Peter Graff and Jason Neely)
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